Micro Economics


Dr. Madhumita Das


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Course Name : Micro Economics

Code(Credit): CUTM1184(3-0-1)

Course Objectives

  • Develop a managerial economics perspective;
  • Facilitate students understand different economic paradigms using Microeconomics concepts

Learning Outcome

  • Apply economic perspective to solve business problems

Course Syllabus

Module 1: The Central Concepts

Logic of Economics: Scarcity and Efficiency: The Twin Themes of Economics;

Three Problems of Economic Organization: Market, Command, and Mixed Economies, Society’s Technological Possibilities: Inputs and Outputs; The Production-Possibility Frontier: Applying the PPF to Society’s Choices;

The Modern Mixed Economy: How Markets Solve the Three Economic Problems; Circular Flow of an Economy; The Invisible hand given by Classical Economists; The visible hand of the government given by modern Economists

Module 2: Demand, Supply and its Applications

Basic Elements of Supply and Demand: Forces behind the demand and supply curve; Shifts in demand and supply curve; Equilibrium of Supply and Demand; Price Rationing;

Supply and Demand: Elasticity and Applications: Price Elasticity of Demand and Supply; Elasticity and Revenue; The Paradox of the Bumper Harvest; Applications to Major Economic Issues: Impact of a Tax on Price and Quantity; Minimum Floors and Maximum Ceilings;

Demand and Consumer Behavior: Classical Utility Theory-Cardinal Utility; Neoclassical  Utility Theory-Ordinal Utility; The paradox of value; Leisure and the Optimal Allocation of Time

Module 3: Theory of Production, Cost

Theory of Production and Marginal Products: The Production Function; Total, Average, and Marginal Product; The Law of Diminishing Returns; Returns to Scale; Technological Change; Empirical Estimates of the Aggregate Production Function;

Economic Analysis of Costs:Total Cost: Fixed and Variable; The Relation between Average Cost and Marginal Cost; The Link between Production and Costs; Diminishing Returns and U-Shaped Cost Curves; Choice of Inputs by the Firm; Marginal Products and the Least-Cost Rule; Transaction Cost, Opportunity Cost and Markets

Module 4: Decisions of the Firm

Perfect and Imperfect Market: Perfect competition and Pareto optimality; Sources of imperfect competition; Economic Costs of Imperfect Competition; Public Policies on Imperfect Competition

Module 5: Market Failure and Inefficiency

Economics of Risk and Uncertainty: The Economic Impacts of Speculation; Market Failures in Information; Moral Hazard and Adverse Selection;

Externalities: Market Inefficiency with Externalities; Analysis of Inefficiency; Valuing Damages and Policies to Correct Externalities


Suggested Text Books

Geetika, Ghosh. P. & Roy Choudhury. P., ‘Managerial Economics’, Tata McGraw Hill Education
Pvt Ltd, New Delhi
Samuelson, Paul A. and Nordhaus, W.P., ‘Economics’, McGraw Hill, New York
Pindyck, R.S., Rubinfeld D. L. and  Mehta P. L., 'Microeconomics', Pearson Education

Session Plan

Session 1

Introduction to Managerial Economics

Presentation:Introduction to ME


Session 2

Scarcity and Efficiency: The Twin Themes of Economics

Presentation: Scarcity and Efficiency


Session 3

The Three Problems of Economic Organization

Presentation: The Three Problems of Economic Organization


Session 4

The Production Possibility Frontier

Presentation-The Production-Possibility Frontier


Session 6

Session 7-Project

Assignment 1: Identification of Govt Intervention in India in case of inefficiency, inequality and macro economic problems;

Book Review 1: The Great Unraveling: Losing Our Way in the New Century- Paul Krugman

Session 8

Basic Elements of Demand and Supply

Presentation: Demand Analysis


Session 9

Assignment 2: Assess demand and supply of tourism in the wake of COVID-19

Session 12

Assignment 3: “How might a drought that destroys half of all farm crops be good for farmers? If such a drought is good for farmers, why don’t farmers destroy their own crops in the absence of a drought? farmers.” Illustrate this proposition using a supply-and demand diagram

Session 13

Session 14

Caselet 1: Two Ways to reduce quantity of smoking Demanded

Session 15

Classical Utility Theory-Cardinal Utility

Presentation: Utility Theory-classical


Session 16

Neoclassical  Utility Theory-Ordinal Utility

Presentation: Ordinal Utility Theory


Session 17

The Production Function -Total Product, Average Product and Marginal Product

Presentation:Production Theory


Session 19

The Law of Diminishing Returns

Game: The Tennis Ball

Session 21

Empirical Estimates of the Aggregate Production Function

Presentation: https://slideplayer.com/slide/7659382/

Session 23

Session 26

 Transaction Costs, Opportunity Cost and Markets

Presentation: Opportunity Cost and Markets


Session 27-Project

Book Review 2: Good Economics for Hard Times: Abhijeet Banerjee and Esther Duflo

Session 28

 Perfect competition and Pareto optimality

Presentation: Perfect competition and Pareto optimality


Session 29

 Sources and Economic costs of imperfect competition

Presentation: Economic Costs of Imperfect Competition


Session 31

 The Economic Impacts of Speculation

Presentation: The Economic Impacts of Speculation


Session 32

 Market Failures in Information

Presentation: The Economic Impacts of Speculation

Session 34

 Moral Hazard and Adverse Selection

Presentation: Market Failures in Information

Session 36-Project

Session 38

Valuing Damages and Policies to Correct Externalities

Presentation: Valuing Damages and Policies to Correct Externalities


Session 39

Assignment 4: Students need to pick up one negative externality and come up with ideas to correct them

Session 40

Caselet 2: The Case for taxing carbon

Session 41-Project

Book Review 4: The idea of Justice: Amartya Sen

Session 42

Doubt Clearing and Wrap up

Our Main Teachers

Dr. Madhumita Das

Assistant Professor

“We are what we repTeacherseatedly do. Excellence, therefore, is not an act but a habit” I have received my  Ph.D. from the Department of HSS, Indian Institute of Technology (IIT) Kharagpur. Prior to my Ph.D., I also have degrees in M.Phil. in Economics (2007) and MA in Economics (2005), both from Ravenshaw University, Odisha. Throughout my […]